Shares of Tube Investments of India, a Murugappa Group company gained 5.5% on Friday’s early trades to touch a fresh all-time high of ₹ 3,398.70 apiece in an otherwise weak market due to a healthy business outlook.
Tube Investments of India Limited (TII) is one of India’s leading manufacturers of a wide range of products for major industries such as automotive, railway, construction, mining, agriculture, and so on. Its major verticals are engineering, metal-formed products and bicycles. Recently, it forayed into the TMT bars and truck body-building business.
Analysts at Motilal Oswal Financial Services said that the company offers a robust growth story, driven by reasonable growth in the core business and by leveraging strong cash flows of the core business (TI-1) to systematically incubate future growth platforms (TI-2) and opportunistic acquisitions of stressed assets (TI-3) at attractive prices.
It has maintained a buy rating on the stock with a target price of ₹ 3560.00 apiece. This translates to an upside of 11% as compared to its share price of ₹ 3,205.00 apiece on Friday’s closing bell.
Tube Investments of India is a large-cap company with a market capitalization of ₹ 62,239 crores. It has an ideal return on equity of 22.47% and an ideal debt-to-equity ratio of 0.18. Its shares were trading at a price-to-earnings ratio (P/E) of 55.68, which is higher than the industry P/E of 45.10 per share, indicating that the stock might be undervalued as compared to its peers.
The company’s promoters hold a 46.21% stake in it, followed by FIIs with 28.78%, retail investors with 14.39%, mutual funds with 10.34% and other domestic institutions with 0.28%.
In the past year, TII’s share price increased by 101.74% to give multibagger returns. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.01 lakhs today!
Written By Simran Bafna
